Snap gave out huge stock rewards in order to snag top talent

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Dive Brief:

Snap is among the growing list of companies that are issuing stock awards to attract and retain talent — and the company spent a much larger chunk of change on those awards compared to Facebook, Twitter or LinkedIn, CNBC reports. Snap's stock awards are largely performance and time-based incentives that vest over a four-year period.

Companies that can't afford the big salaries that Google and Facebook pay engineers and other professionals offer stock awards instead. Snap reported a 27-fold jump in share-based pay in the fourth-quarter of 2017, CNBC reports.

Snap went public in 2017, when it recorded $2.6 billion in expenses for stock-based compensation, says CNBC. The incentive amounted to 77% of Snap's net loss and more than three times the amount of revenue the company generated. The amount is expected to decrease in coming years, however.

Dive Insight:

Snap is among other employers who are offering stock awards to compete for talent. Chobani started offering workers stock ownership in 2016. Microsoft did the same as a young company, making many of its early employees millionaires.

Stock awards are expensive, though, as CNBC notes. For companies that are performing well, stock can be an attractive incentive in recruiting talent and a key way to diversify a compensation package. However, moderately performing companies might want to weigh the cost of stock awards against offering higher salaries.

For employers looking to expand their total rewards packages, money still matters, but a wide offering of benefits can also go a long way in retaining top talent.